Raia Drogasil S.A. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Raia Drogasil S.A. (BVMF:RADL3) released its yearly result to the market. The early response was not positive, with shares down 8.8% to R$17.38 in the past week. Raia Drogasil reported R$39b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of R$0.72 beat expectations, being 8.2% higher than what the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Raia Drogasil

Taking into account the latest results, the current consensus from Raia Drogasil's nine analysts is for revenues of R$44.5b in 2025. This would reflect a meaningful 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 5.0% to R$0.73. In the lead-up to this report, the analysts had been modelling revenues of R$45.1b and earnings per share (EPS) of R$0.78 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at R$25.71, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Raia Drogasil analyst has a price target of R$33.00 per share, while the most pessimistic values it at R$17.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Raia Drogasil's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Raia Drogasil'shistorical trends, as the 14% annualised revenue growth to the end of 2025 is roughly in line with the 16% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So it's pretty clear that Raia Drogasil is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Raia Drogasil. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Raia Drogasil going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Raia Drogasil you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.